Saturday, May 31, 2014

What else could we have done with the billions of dollars squandered on regulatory friction and the pursuit of questionable claims of damage?

Behind the public-relations facade of "advocacy" and "justice," much of the American legal system is unproductive regulatory friction and the pursuit of extortionist rentier skims. I recently received an email that reflects many aspects of this systemic reality.

The letter blares legal threat in its upper-case title: TRADEMARK VIOLATION. Not possible trademark violation or alleged trademark violation, but a declaration of the unquestioned guilt of the recipient.

The email then proceeds to the accusation:

We recently visited your website and discovered that you are using the phase “From the Garden to the Table” on your website.

This is not an accurate statement. I used the phrase once within a longer string of words: from the garden to the table in 20 minutes. I am not "using the phrase on my website," I wrote those words once as a description of my individual actions, i.e. harvesting vegetables from my garden and preparing a meal with them in 20 minutes.

Next, the email lists the URL to the offending page on my site, but when I clicked on the link, it led to some other website:

This URL http://www.oftwominds.com/blogfeb14/chard2-14.html led tohttp://experimentalstation.org/garden-to-plate-for-carnegie-elementary-school-students-woodlawn-chicago, a page of the Chicago-based organization experimental station.

In other words, this threatening legal letter was filled with errors both subtle and egregious. Anecdotally, such sloppiness is hardly unique in American law--especially when it comes to issuing veiled threats and enforcing rentier skims. The basic approach in America is unleash a tsunami of questionable threats and demands and then see what sticks.

The email then declared: Please take formal and Legal notice that the phrase “From the Garden to the Table” is a TRADEMARKED NAME of a California based non-profit organization. This registration is listed under #3118945 in the US Patent and trademark office.

At this juncture, we have reason to believe that your utilization of the trademark may be an oversight, and as such, we are sending you this notice to request that you immediately remove this phrase from your website.(emphasis in the email)

Would any judge declare my single use of this phrase in the context of a longer phrase a violation of trademark law? It's difficult to see how my writing the plain English descriptive phrase from the garden to the table in 20 minutes harms the trademark or the holder of the trademark, from the garden to the table, a non-profit organization whose slogan is Eat & Live Green.

Perhaps the organization has trademarked that phrase as well, so please be cautious in your use of eat & live green as well as from the garden to the table.

You see the Orwellian absurdity of a non-profit promoting growing and eating healthy food devoting resources to threatening individuals and other organizations that share these same goals with unproductive and nonsensical accusations of trademark violation.

If I were a donor of from the garden to the table, I would be wondering if devoting scarce resources to absurd attacks on obviously innocent uses of a trademarked phrase was really a good use of my money.

I would also wonder if such poorly executed "enforcement of trademark" is really the best possible use of the money I donated to further the goal of Eating & Living Green. Wouldn't donors' funds be better spent reaching out to these individuals and organizations, rather than harassing them with bogus accusations of TRADEMARK VIOLATION?

But none of this--the sloppiness, the scattershot accusations, the threatening tone of presumed guilt, the money squandered that could have been spent on something productive--is unique: it is standard practice in America.

We might also ask: why is it even possible to trademark such a phrase? What possible benefit is created by enabling the trademarking of virtually any common phrase, or the patenting of practices such as "photography against a white background"?

The practice of law in America boils down to two activities: enforcing extortionist rentier skims (for example, patent trolls who buy broad patents and then threaten everyone under the sun with questionable patent violations) or seeking extortionist compensation for alleged damages from anyone or any entity with insurance and/or cash to plunder.

The rest of the nation's unproductive legal churn is devoted to complying with the tens of thousands of conflicting and overlapping regulations imposed by layer upon layer of government. Common sense suggests some regulations benefit the broad public, but much of what is passed as "protecting the public" is actually designed to protect established businesses from competition and hide parasitic skims behind complexity fortresses.

All this generates two kinds of extortion: you need to pay legal firms to protect you from frivolous claims of damage (or else bad things happen), and you also have to pay them to "vigorously defend" whatever intellectual property you might own, lest the circling legal sharks snatch it all away (i.e. bad things happen).

This unproductive edifice of legalized extortion, threats, scattershot claims of damage and regulatory friction has a very high opportunity cost to society and the economy. How many potential entrepreneurs decide not to start a business once they see the horrendous costs of complying with overlapping regulatory complexities, and how many close down rather than face the uncertainties and high costs of legal jousting with attorneys whose own costs of filing accusations and threats is near-zero?

What else could we have done with the billions of dollars squandered on regulatory friction and the pursuit of questionable claims of damage? Some estimate the cost of legal extortion and regulatory compliance at $1.9 trillion a year--roughly 12% of the nation's GDP. There is no question we could have done something productive with all this treasure. Instead we have a system of parasitic make-work that incentivizes legalized extortion.

Yes, there are plenty of honest, hard-working attorneys. The problem is not the individuals trapped in the system, the problem is the system itself.

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